EPF to announce record dividend payout today, says report

Updated 6 years ago · Published on 10 Feb 2018 8:33AM · 3 Comments

The Employees Provident Fund is expected to pay a dividend of at least 7.2%, to beat by at least 3.5 percentage points last year’s inflation of 3.7%. – The Malaysian Insight file pic, February 10, 2018.

THE Employees Provident fund is expected to declare a record dividend payout today, the Straits Times reported today.

Quoting a member of the EPF board, who was not named, the report said the retirement fund would be paying out more than RM40 billion to its 14 million subscribers.

“We have been informed it will definitely be higher than before,” the EPF board member was quoted saying yesterday, ahead of an announcement today.

EPF is announcing the highest dividend in 20 years as the country awaits the call for a general election, which Prime Minister Najib Razak is expected to make anytime now. The retirement fund’s announcement will also come on the back of higher payouts from national equity fund Permodalan Nasional Bhd (PNB) and haj fund Tabung Haji.

The EPF manages RM771.2 billion worth of investment assets as of last September, and is the world’s 15th-largest pension fund, according to Willis Towers Watson.

Last year, it paid out RM37 billion in dividends at a rate of 5.7%, and the year before, RM38 billion in dividends at a rate of 6.4% .

EPF chief executive Shahril Ridza Ridzuan had said at the beginning of the year that the retirement fund was maintaining a five-year track record of beating inflation by at least 3.5 percentage points.

As last year’s inflation was 3.7%, the EPF dividend this year would have to be at least 7.2% to meet the five-year track record plan, said the Straits Times.

The last time EPF paid more than 7%  was in 1996 during the Mahathir era, which many think of as a time of economic prosperity for Malaysia.

Since Dr Mahathir Mohamad took office in 1981 till the economic recession in 1997, the EPF’s annual payout averaged nearly 8%.

The EPF’s highest dividend since was 6.84% in 1999.

PNB in December announced a 7% dividend, plus 1% bonus for the first 10,000 units held in more than nine million Amanah Saham Bumiputera accounts because it is marking its 40th anniversary. It also declared a 5%  dividend for Amanah Saham Nasional, resulting in a year-to-date return of 15% for 1.2 million subscribers.

Tabung Haji announced this week a 4.5% endowment for 9.3 million accounts, plus a 1.75% bonus for the 8.7 million accounts holder who had yet to perform the haj. – February 10, 2018.

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Comments

  • EPF has a fund of RM 771.2 billion. 1MDB has a debt of 42 billion, and it has not recorded any net profit, other than drawing down money to finance pilgrims going on Haj mission. EPF is paying dividend at 6.9 per cent amounting to RM 40 billion. Since EPF has been making investment almost twenty times the size 1MDB was ever to raise in loans and bonds, what make Najib think 1MDB could do better. Of course 1MDB does not have to be accountable to Malaysians while EPF has to be accountable to the members. Perhaps, unaccountability to anybody, and the right to play with the money including money laundering was the reason why 1MDB was established.

    Posted 6 years ago by Meng Kow Loh · Reply

  • If 1MDB had been managed like EPF, Malaysians could have benefited from a second retirement fund. No thanks to Najib's recklessness, Malaysians are saddled with a trillion ringgit in debts.

    Posted 5 years ago by Roger 5201 · Reply